Evaluating Designs for a Fiscal Rule in Bulgaria

IMF Working Paper, WP/11/272

Posted: 21 Jul 2016

See all articles by Jochen R. Andritzky

Jochen R. Andritzky

German Council of Economic Experts; International Monetary Fund (IMF)

Date Written: November 10, 2011


The enhanced Stability and Growth Pact calls on euro area members and aspirants to set boundaries to fiscal deficits through high-level legislation. A limit on the deficit, such as the deficit ceiling in Bulgaria’s organic budget law, serves to protect solvency. The recent crisis clearly indicated that the key challenges are not only to contain the deficit but also to avoid a procyclical stance during upswings and to build a buffer for rainy days. Ideally, fiscal policymaking is guided by a fiscal rule that adapts through the economic cycle. This paper lays out the objectives of fiscal rules and analyzes how these objectives can be met in Bulgaria through either a growth-adjusted balance rule or an expenditure rule complemented by a deficit ceiling.

Keywords: Fiscal policy, Budget deficits, Fiscal rules, Bulgaria

JEL Classification: E61, E62, H61

Suggested Citation

Andritzky, Jochen, Evaluating Designs for a Fiscal Rule in Bulgaria (November 10, 2011). IMF Working Paper, WP/11/272, Available at SSRN: https://ssrn.com/abstract=2812254

Jochen Andritzky (Contact Author)

German Council of Economic Experts ( email )

Federal Statistical Office
Gustav-Stresemann-Ring 11
Wiesbaden, Hessen 65180

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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